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I am an active duty servicemember thinking about refinancing or consolidating my existing debt. What should I watch out for?

Answer:

Before
you refinance or consolidate existing debt, consider whether your loan or debt
is covered by the Servicemembers Civil Relief Act (SCRA).

For
servicemembers with loans taken out before
entering active duty military service, the SCRA provides a variety of
protections including an interest rate reduction down to 6 percent and
foreclosure protections, among others.

If you are on
active duty when you refinance or consolidate, the new loan will not be covered
under the protections of the SCRA since it is no longer considered a
pre-service loan. For example, if you took out a student loan before you
entered active duty, but then consolidate that student loan after entering
active duty, you would not then be able to request an interest rate reduction
down to 6 percent on that new consolidation loan.

Learn more about .

Or, if you took
out a mortgage before you entered active duty, and want to refinance after
active duty, you would lose the foreclosure protections provided under the
SCRA.

The Servicemembers Civil Relief Act (SCRA) provides legal and financial protections to those who have answered the Nation’s call to serve.

If you still have questions about your rights under the SCRA,
contact your local JAG office for more information. To find your JAG Legal Assistance
Office . You also may be able to get assistance from .

Note: Do not include sensitive information like your name, contact information, account number, or social security number in this field.

The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The Miss April updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.